Open Season and Your Health Insurance

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By on October 22, 2013 in Pay & Benefits with 0 Comments

Health insurance has been a lead topic in the media for several years. For those current or retired federal employees who may be wondering what health insurance policy is the best one for you, the “open season” for the Federal Employees Health Benefits Program (FEHB) is coming up soon. Each year, Open Season runs from the Monday of the second full workweek in November through the Monday of the second full workweek in December. This is your chance to switch to a different policy if you decide that is in your best interest.

This year, open season will run from Monday November 11, 2013 – Monday December 9, 2013.

During the annual FEHB Open Season, you can enroll in an insurance plan, cancel an enrollment, change plans or options, and waive or begin participation in premium conversion. If you waived participation in premium conversion, you can change from self- and-family enrollment to a Self Only enrollment or cancel your enrollment at any time. You can make other changes during Open Season or due to certain events. Your servicing Human Resources Office should be able to give you more information about these events.

What is Premium Conversion?

Federal employees can use pre-tax dollars to pay for health insurance premiums to the FEHB. Premium conversion uses Federal tax rules to allow current federal employees to deduct their share of health insurance premiums from their taxable income which effectively reduces their taxes. Premium conversion for Federal Employees enrolled in the FEHB Program went into effect in October 2000.

Health Insurance Changes and Federal Employees

A number of readers have written in to ask if they will have to join the new health exchanges created by the new Obamacare system instead of the FEHB. In a recent survey, about 92% of those responding did not want to give up their insurance under the FEHB to join one of the new health insurance exchanges. While legislation has been introduced to require federal employees to use the new health care system, the legislation has not passed.

And, in good news for the the federal workforce, most of the significant changes now occurring in our health care process will not impact federal employees, in part because some of the changes now required by the new law are already included in the federal insurance plans. The estimated 14 million people who purchase their own health insurance coverage because it was not available through their employer may not be as fortunate as the requirements will make mandatory changes in many policies.

Reportedly, hundreds of thousands of Americans who previously paid for their own health insurance coverage are now seeing their health insurance cancelled or the health insurance premiums go up dramatically. Insurers argue the cancellations and rate increases are necessary because the policies to not meet the requirements the Affordable Care Act requires beginning on January 1, 2014. Some companies are canceling a large percentage of the policies issued in some states.

At the same time, some private sector policyholders will qualify for government subsidies.  Also, policyholders with limited coverage for their medical conditions may get plans with better benefits and the policies at a lower rate under the new health care system. It would not be surprising for insurance companies t0 discourage policyholders with a greater risk of requiring expensive coverage by charging more for the premium and effectively encouraging them to enroll under the government healthcare exchanges instead.

But, while federal employees are largely immune from the changes that are occurring, this does not mean that your insurance premiums will remain the same. Many federal employees and retirees will see some increase in their premiums in 2014. Everyone should check out the new rates as one step in deciding which policy may be the best one for you in the coming year.

Here are a few answers to some of the most common questions we hear from readers about their federal health insurance.

When I change plans, what date will it be effective?

Open Season changes for most Federal employees are effective the first day of the first full pay period that begins in January. Generally, mid-year changes are effective on the first day of the pay period which begins after your enrollment is received by your Human Resources Office.

Since I Have FEHB Coverage, Do I Need Medicare Coverage?

If you are entitled to Part A without paying the premiums, you should take it, according to OPM, even if you are still working. This may help cover some of the costs that your FEHB plan may not cover, such as deductibles, coinsurance, and charges that exceed the plan’s allowable charges. There are other advantages to Part A, such as (if you also enroll in Part B,) being eligible to enroll in a Medicare Advantage Plan. (Also see Medicare: Part B or Not Part B)

Can I Change My FEHB Enrollment When I Become Eligible for Medicare?

You may change your FEHB enrollment to any available plan or option at any time beginning 30 days before you become eligible for Medicare. You may use this enrollment change opportunity only once. You may also change your enrollment during the annual Open Season, or because of another event that permits enrollment changes (such as a change in family status).

Do FEHB Plans and Medicare Cover the Same Types of Expenses?

Generally, plans under the FEHB Program help pay for the same kind of expenses as Medicare. FEHB plans also provide coverage for emergency care outside of the United States which Medicare doesn’t provide. Some FEHB plans also provide coverage for dental and vision care. Medicare covers some orthopedic and prosthetic devices, durable medical equipment, home health care, limited chiropractic services, and some medical supplies, which some FEHB plans may not cover or only partially cover (check your plan brochure for details).

Can I Reenroll in FEHB If I Disenroll From the Medicare Advantage Plan? 

If you provide documentation to your retirement system that you are suspending your FEHB coverage to enroll in a Medicare Advantage plan, you may reenroll in FEHB if you later lose or cancel your Medicare Advantage plan coverage. However, you must wait until the next Open Season to reenroll in FEHB, unless you involuntarily lose your coverage under the Medicare Advantage plan (including because the plan is discontinued or because you move outside its service area). In this case, you may reenroll from 31 days before to 60 days after you lose the Medicare Advantage plan coverage, and your reenrollment in FEHB will be effective the day after the Medicare Advantage plan coverage ends (or ended).

If I join a plan because my doctor is a participating doctor or specialist and then my doctor drops out of my plan’s network in the middle of the year, can I switch plans?

No. You would need to wait for Open Season. It is not uncommon for providers to leave plans mid-year. Other plan providers will be available to provide care.

Open Season changes for most Federal employees are effective the first day of the first full pay period that begins in January. Generally, mid-year changes are effective on the first day of the pay period which begins after your enrollment is received by your Human Resources Office.

Another plan has some extra services that I can’t get in my own plan. When is the next time I can change plans?

You can change plans during the annual FEHB Open Season and whenever you have a qualifying life events (QLE) — such as marriage. Becoming aware of another plan that has better benefits, even if you didn’t expect to want the extra benefits when you had a chance to change plans before, does not qualify as a “QLE” that allows you to change plans.

What Will You Do?

If you decide to change your health insurance among the plans available to you in your area, the open season coming up is your best chance to do this. Even if you do not change policies, you should check out the premiums for your current health insurance policy under the FEHB so you know what your expenses will be for this employee benefit in 2014.

© 2020 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.


About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47